I and many others are long-time proponents of using both Veil and Bitcoin as cash. A discussion has arisen in the Veil community of people sponsoring developers working on specific development projects, although this is applicable to any Veil Project role.
One commented that as we are “Veiliens” we would surely prefer all remuneration to be done using Veil. This should communicate our preference for and support of Veil as a currency, and certainly it is superior as a privacy coin, but there are some factors that unexpectedly, or ironically, as some would put it, work the opposite!
Let’s suppose that we are paying a developer who has no other source of income, not even welfare. So we know that he has to pay for food or he will starve, and for computer resources too. While some might suppose that any Veil that gets sold for food must have been bought. Buying and selling pressure should cancel each other out, but this is not going to be the case.
Let’s consider that this Veil is not being bought at the exact same time as the same amounts are being sold, in fact, as a Veilien you already have a bag of it, but we also believe that Veil needs to recover 100 to 1000 times its current value, so we will consider the demand and supply and market sentiment dynamics as they are after a 99.9% drop in the value.
Certainly, if Veil had continued its rise in 2019 from its regular trading in the five to seven thousand satoshi range, with a little-known all time high of ten or twenty thousand sats, Veil would certainly be trading comfortably in the multi-dollar range. 20,000 satoshis today, at the time of writing is $5.63. Well, if you are prepared to pay someone 100,000 Veil for some work, valued at $338.20 today, with a Veil price of 12 sats (since increased before posting this article), knowing that those one hundred thousand Veil should be worth TWENTY BITCOIN, or USD$564,236.20, and with a $100,000 Bitcoin, TWO MILLION DOLLARS, you would not want to part with that Veil knowing that they will be DUMPED on the market and probably not even get the $300 dollars worth of work you are expecting!
We see therefore that the Veilien above, by allowing those 100,000 Veil to be dumped on a weak market is not only communicating that they don’t think Veil should regain its all time high, but his or her action will only further depress the market.
It should also be noted that no Veil team member is receiving 100,000 Veil in a month for their work. So, let’s consider the opposite approach. Paying with a currency that has established value and a highly liquid market. That might be Bitcoin itself, or if the sponsor and the sponsored developer live in the same country, it might be their shared national fiat currency.
Before that, let’s consider a managed approach to using Veil as an incentive. The sponsor has the Veil already, as should be expected for a Veilien believer, so he pays the developer, and at the same time places buy orders for the full amount that the developer will need to sell for his or her essential needs. However low the sponsor places his buy orders is the maximum extractable value that the developer can likely instantly gain from the market, BUT there might be other sellers, and the developer might not manage to sell all of the sponsorship before the sponsor’s BIDs are all taken. So, the sponsor needs to bid for a greater amount of Veil or the value transfer from the sponsor to the developer may fail. This has inefficiencies, as the sponsor has to budget more than the value the developer will gain from the transaction, and both will have to play the market, distracting both from developing Veil.
Now, let’s consider the fiat sponsorship approach, much as we instinctively abhor and avoid fiat currencies. Assuming the sponsor and the sponsored both are able to use the given fiat currency, not at all certain these days, so long as there are no transaction fees, and no interference from banking or government agencies, the full value of the sponsorship will be enjoyed by the beneficiary of that sponsorship, and they will be able to put their full efforts into the necessary developments they have been hired to do. At the same time, the sponsor, a faithful Veilien, can hold on to their (more) valuable (to them) Veil, to be used when the product of the development work has been able to make Veil more popular. Furthermore, the developer seeing how they are improving the ecosystem, may be motivated to budget some percentage of their earnings, from the sponsorship or from other income, into buying some Veil for themselves! This will be Veil that does not get dumped on the market.
Now, I’m still in favour of using Veil, Bitcoin, Bitcoin Cash, and so on, as cash, it is necessary, when you expect a long term price recovery, to replace any amount that has been used for spending, knowing that when you spend what was, and should once again be, ten thousand dollars, but only receive five hundred dollars of value for it, if you really believe that, you will replace it the same day, as a matter of urgency.
Please join our Veil community. We hope you become a “Veilien” and see the merit in sponsoring a developer for the RingCT staking project, or for other projects within the Veil ecosystem, or sponsor or become a marketer. Don’t be too shy to attach your business name to the sponsorship, for example: “Bill’s Bicycle Boutique, sponsor of Sato’s She, Veil RingCT staking developer!”
- The Veil Project: https://veil-project.com
- Veil Project, Discord: https://discord.veil-project.com
- Veil-Dev, Discord: https://discord.gg/gGPcwxnSuR
[ Please note that this approach assumes that the current coin price is as a result of a deep bear market. It is highly likely that the opposite approach would be most popular in the heights of a bull market, where anyone wants to get their hands on the currency as a high priority. ]
]]>